Brooklyn real estate: the cachet of cool at lower prices

After 23 years in SoHo, Deirdre Quinn and her fashion company, Lafayette 148, left the Manhattan neighborhood in August for more space at a better price.

She moved Lafayette 148 and her own home to Brooklyn.

“I saved two-thirds of my rent, and we have all our employees on one floor with 70,000 square feet, which was a game changer for the culture of the company,” Quinn says of the new Brooklyn Navy Yard location. She has another half floor in the building and keeps one floor for retail in Manhattan. “We also have four balconies with views you could die for.”

Quinn’s employees were initially concerned about the commute and local food options while she fretted over how stores like Saks and Bloomingdales would react to her company’s move.

“But we had zero issues,” says Quinn, who now lives across the street. “When people come here for meetings, they love it.”

Quinn’s story symbolizes commercial real estate’s growth in Brooklyn. Bigger spaces and rents that remain cheaper than in Manhattan are drawing businesses, part of a transformation that stretches over a decade.

< “You can see the changes in Brooklyn just by looking at the skyline,” says Samara Karasyk, the Brooklyn Chamber of Commerce’s interim president. “But the growth is not just in Downtown Brooklyn. It’s in the Navy Yard and Industry City, but also in central and even south Brooklyn.”

The borough is seen as the capital of creative talent in the design, media and tech fields, says Ofer Cohen, founder and CEO of the Brooklyn-focused commercial real estate firm TerraCRG.

“This is where people live now, and they want to walk or bike to work,” Cohen says. “Companies are expanding from or moving from Manhattan, and Brooklyn companies are growing a bigger footprint.”

Even with its growth, the borough is at a “real turning point,” says Regina Myer, president of the Downtown Brooklyn Partnership. Myer points to projects like Tishman Speyer’s 10-story building the Wheeler as one of three major Class A projects and renovations at buildings like 41 Flatbush Ave.

Tech and other startups have brought new energy to an area dominated by civic and court uses, Myer says.

“That is the big headline,” she explains.

Mitzi Flexer, director of brokerage at Cushman & Wakefield, says the other headline is a mixed bag: Prices have finally dropped, leading to more transactions on spaces.

“I don’t know how happy the landlords are about having to reduce prices by 15 to 20 percent,” she says, “but they are being more realistic, and from the tenant side that’s a healthy thing.”

When it comes to retail, Flexer says, tenants are moving into new neighborhoods, being “more adventurous.”

“They are in North Williamsburg and Greenpoint saying, ‘We want to be in that market,’” she says.

Flexer points to retail successes in Boerum and Cobble Hill. “There are more international tenants, like Bonobos and Benefit Cosmetics,” she says. “It’s very encouraging that they are not just focused on the more established neighborhoods.”

Cohen and Myer say much of the growth in retail has been in restaurants, bars, gyms and day care operations rather than in high-end retail, but they stress those businesses are vital.

“They fill holes in the quality of life and add to a richer downtown,” Myer says, while Cohen adds there is growth throughout Brooklyn, from Gowanus to Bedford-Stuyvesant to Greenpoint to East Flatbush.

“As people move to more affordable neighborhoods,” Cohen says, “the amenities follow—first a pioneer, then a cluster and then a whole corridor.”

Cohen is optimistic that Brooklyn’s growth in retail and office space is far from its peak.

“We’re at the beginning of our trajectory,” he says. “It has been great, and it’s about to get even better.”

Sign up for newsletters

Breaking News - Delivered as it happens

Daily Alert - Delivered by 4pm, M-F

Morning 10 - Delivered by 8am, M-F

Small-Business Alert - Delivered Wed.

Editor’s Picks - Delivered Sat.

Real Estate Daily - Delivered by 2pm, M-F

Health Pulse - Delivered by 6am, M-F

Crain's Events Calendar

People on the Move - Delivered Fri.

Small-Business Toolbox - Delivered Th

EMAIL ADDRESS

Please enter a valid email address.

Please enter your email address.

Please select at least one newsletter to subscribe.

Get our newsletters

Staying current is easy with Crain's New York news delivered straight to your inbox, free of charge

Email Address

Crain's Student Offer

We offer a discounted rate through Student Beans for students with a valid .edu email address. For only $10, you can get the leading source of business news, anytime & anywhere, for an entire year.

Crain’s New York Business is the trusted voice of the New York business community—connecting businesses across the five boroughs by providing analysis and opinion on how to navigate New York’s complex business and political landscape.